Chesapeake Energy announced Wednesday it is doubling its share repurchase program from $1 billion to $2 billion.
The company said its Board of Directors reached the decision to offer up to $2 billion in aggregate value of its common stock and/or warrants through the end of 2023.
To date, under its previously authorized program, Chesapeake has repurchased approximately 5.4 million shares of its common stock at an average price of approximately $89 per share.
At the close of trading on Tuesday, Chesapeake shares had a gain of $3.27 or 4.07% to finish the day at $83.55.
Nick Dell’Osso, Chesapeake’s President and Chief Executive Officer, stated “We firmly believe our stock is undervalued and are pleased to announce material progress on our buyback program today. Doubling our buyback authorization to a total of $2 billion, in conjunction with our commitment to our base and variable dividend program, highlights our confidence in our sustainable free cash flow generating capability and our commitment to shareholder returns. Our disciplined capital allocation strategy is delivering leading per share cash returns and highlighting the compelling value in our shares.”
Wednesday’s announcement came the same day that Dell’Osso, attending a conference in New York said his company anticipated nearly 10% oilfield inflation in 2023 compared with the current year.
The repurchase authorization permits Chesapeake to make repurchases on a discretionary basis as determined by management. Acquisitions may be made through open market or privately negotiated transactions.